Exam 9: Metric Analysis of Financial Statements

For most profitable companies, the return on total assets will be less than:

The relationship of 120 to 100 can be expressed as 1.2, 1.2:1, or 120%.

The purpose of an audit is to:

A company reports the following: ​ Net sales \ 750,000 Average accounts receivable (net) \ 50,000 ​ Determine the (a) accounts receivable turnover and (b) days' sales in receivables.Round your answers to one decimal place.

The return on stockholders' equity is computed as:

The following items are reported on a company's balance sheet: ​ Cash \ 258,000 Marketable securities 114,000 Accounts receivable 187,000 Inventory 204,000 Notes payable (short-term) 249,000 ​ Determine the (a) current ratio and (b) quick ratio.(Round your answer to one decimal place.)

The ratio of the market price per share of common stock on a specific date to the annual earnings per share is referred to as the price-earnings ratio.

The ability of a business to pay its debts as they come due and to earn a reasonable amount of income is referred to as:

The Sarbanes-Oxley Act requires management to prepare a report on internal control.

Basic analytical method in which all items are expressed only in relative terms (percentages of a common base) and are often useful for comparing one company with another or for comparing a company with industry averages are:

Based on the following data, what is the quick ratio, rounded to one decimal place? ? Accounts payable 32,000 Accounts receivable 64,000 Accrued liabilities 7,000 Cash 20,000 Intangible assets 40,000 Inventory 72,000 Long-term investments 100,000 Long-term liabilities 75,000 Marketable securities 35,000 Notes payable (short-term) 25,000 Property, plant, and equipment 625,000 Prepaid expenses 2,000

From the following data for the current year, compute the average accounts receivable. ? Net sales on account during the year \ 420,500 Cost of merchandise sold during the year 362,000 Accounts receivable at the beginning of the year 36,120 Accounts receivable at the end of the year 33,200 Inventory at the beginning of the year 63,000 Inventory at the end of the year 92,000

Transic Corporation has the following financial data for 2016 and 2017. ? 2017 2016 ASSETS Current Assets: Cash \ 48,000 \ 14,000 Marketable Securities 9,000 13,000 Accounts Receivable 35,000 24,000 Other Current Assets 15,000 18,000 Total Current Assets 107,000 69,000 Fixed Assets (net) 140,000 130,000 Total Assets \ 247,000 \ 199,000 LIABILITIES Current Liabilities \ 72,000 \ 52,000 Long-term Liabilities 50,000 37,000 Total Liabilities \ 122,000 \ 89,000 Total Stockholders' Equity \ 125,000 \ 110,000 Total Liabilities And Stockholders' Equity \ 247,000 \ 199,000 ? Based on Transic's current ratio, which of the following statements is true regarding the company?

Based on the following data, calculate the amount of quick assets. ? Accounts payable 68,000 Accounts receivable 89,000 Accrued liabilities 12,000 Cash 58,500 Intangible assets 38,000 Inventory 61,000 Long-term investments 250,000 Long-term liabilities 66,000 Marketable securities 59,000 Notes payable (short-term) 47,000 Property, plant, and equipment 637,000 Supplies 17,000

Profitability refers to the ability of the business to:

The following information is available for Morgan Corporation: 2016 Market price per share of common stock \ 25.00 Earnings per share on common stock 1.25 ? Which of the following statements is correct?

Statements in which all items are expressed as percentages with no dollar amounts are called common-sized statements.

"Working capital" is another term for the current ratio.

The return on total assets is one of the measures of profitability.

From the given data for the current year, determine the inventory turnover. ? Net sales on account during the year \ 316,780 Cost of merchandise sold during the year 688,500 Accounts receivable, beginning of year 47,000 Accounts receivable, end of year 62,000 Inventory, beginning of year 157,000 Inventory, end of year 149,000